Stating the Obvious

Fujifilm gave an interview to the Nikkei newspaper that reported says that they'll cut their compact camera lineup by 50%. This comes on the heels of Olympus stating at their year-end financial presentation that they'll cut their compact camera sales by half.

CIPA compact camera shipment numbers for the first four months of 2013: 55.9% of last year.

Given that we're talking about 15 million cameras during this period versus nearly 30 million last year, there really are only two choices: reduce production to match demand and keep your current market share, or keep your production up and try to take more market share. Fujifilm and Olympus have raised the flag and said "keep market share." Nikon still seems to be on the "gain market share" track with their projections. Which poses the question that reporters aren't asking Olympus and Fujifilm (and others): "If Nikon is successful in gaining market share, wouldn't you have to cut production even more?" Or here's one: "Why are production numbers for compact cameras 103.7% of last year if sales are falling 50%?"

We're in somewhat uncharted territory here. Compact camera sales are in a precipitous fall. There is plenty of excess manufacturing capacity. Heck, there's seriously excessive design capacity. The camera makers are in denial. Low end camera demand won't likely ever come back, as low-end cameras are now defined by smartphones. Moreover, all their extra design capacity has achieved nothing that has put a stop to the compact camera sales fall. Isn't that an indictment of the design groups in those camera companies?

The questions Fujifilm executives really need to answer are these: "Why would you even want to be in that business?" "Can you really restructure or jettison the resources devoted to compact cameras fast enough to preclude additional losses in the imaging group?" "If you maintain your small market share as you're suggesting, how would you ever be profitable being #5 or #6 in what's basically a commodity market?" "You've previously stated that emerging markets, bridge cameras, and other changes you were making would save this part of your business, but you were wrong; why should you be believed now?"